2019 US Tax Reform — Estate and Gift Tax Implications

Estate Tax

For any US individual passing away after December 31, 2018, the federal estate tax exemption amount increases to $11.4 million (from $11.18 million in 2018), per individual. That means an individual can leave $11.4 million to heirs and pay zero federal estate (or gift) tax. Married couples will be able to shield $22.8 million.

The exemption amount is expected to be adjusted annually due to inflation. Unless the tax law changes between now and then, the exemption amount per US individual will revert back to $5 million plus the inflation adjustment, on January 1, 2026.

Gift Tax

In 2019, a US individual can gift up to $15,000 per individual (same as 2018). Any gift made over this limit will count against the $11.4 million lifetime gift tax exemption amount.

Gifts made to a non-US citizen spouse are limited to $155,000 for 2019 (up from $152,000 in 2018).

Interesting Fact

Did you know…the Trump tax cuts slashed the number of estates subject to the federal estate tax, by doubling the exemption amount from a base level of $5 million per person (2017).

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